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Sparc Systems Ltd.

BSE: 531370 Sector: IT
NSE: N.A. ISIN Code: INE960B01015
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NSE 05:30 | 01 Jan Sparc Systems Ltd
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VOLUME 2129
52-Week high 10.36
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P/E
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 10.36
CLOSE 10.36
VOLUME 2129
52-Week high 10.36
52-Week low 2.42
P/E
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sparc Systems Ltd. (SPARCSYSTEMS) - Auditors Report

Company auditors report

To the Members of Sparc Systems Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the Ind AS Financial Statements of Sparc Systems Limited ("theCompany") which comprise the balance sheet as at 31st March 2020 and the statementof Profit and Loss statement of changes in equity and statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS Financial Statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 and Loss changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act

2013. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the Ind AS Financial Statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS Financial Statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS Financial Statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Description of each key audit matter in accordance with SA 701.

The Key Audit Matter How the matter was addressed in our Audit
Loans & Advances Deposits etc.
The value of loans and Advances Deposits as at 31st March 2020 is significant and there is a high degree of complexity and judgement involved for the company in the estimating individual and collective credit impairment provisions and write-offs against these loans. Our audit procedure included considering the appropriateness of the company's accounting policies for impairment of financial assets and assessing compliance with Ind AS 109.
For loans which are assessed for impairment on a portfolio basis we performed particularly the following procedures:
The Company's impairment provision for receivables from financing business is based on the expected credit loss approach laid down under Ind AS 109. Under this approach the management has been required to exercise judgement in areas such as; - We understood the methodology and policy laid down for loans given by the company.
- Calculation of past default rates - We have verified the existence of recovery process plant in the event of default.
- Applying macro-economic factors to arrive at forward looking probability of default; and - We have verified the historical trends of repayment of principal amount of loan and repayment of interest.
- Significant assumption regarding the probability of various scenarios and discounting rates for different industries considering individual borrower profile. - We tested the reliability of the key data inputs and related management controls.
In view of the high degree of estimation involved in the process of calculation impairment provision and considering its significance to the overall Ind AS financial statement whereby any error or omission in estimation may give rise to a material misstatement of Ind AS financial statements it is considered as a key audit matter. - We have assessed the assumptions made by the company in making provision considering forward looking information.
Refer Note 8 & 11 to the Financial Statements.

Information Other than the Ind AS Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the annualreport but does not include the Ind AS Financial Statements and our auditor's reportthereon. Our opinion on the Ind AS Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the Ind AS Financial Statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information. We are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS Financial Statements that give a true and fair view of the financialposition financial performance (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

? Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

? Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

? Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

? Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Ind AS Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

? Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the Ind AS Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation.

? We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS Financial Statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable. As required bySection 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid Ind AS Financial Statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules

e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) With respect to the matter to be included in the Auditors' report under Section197(16): In our opinion and according to the information and explanation given to us theCompany has not paid remuneration to its directors during the year hence the provisions ofand limit laid down under section 197 read with Schedule V of the Act is not applicable.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

1) The Company does not have any pending litigations which would impact its financialposition as on 31.03.2020.

2) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

3) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For R SONI & COMPANY
Chartered Accountants
Firm's Registration No. 130349W
Sd/-
RAJESH SONI
Partner
Membership No. 133240
UDIN: 20133240AAAAKF9282
Place of Signature: Mumbai
Date: 30.06.2020

ANNEXURE A TO THE AUDITORS' REPORT

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the Ind AS Financial Statements for the year ended March 31st 2020 we reportthat:

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The Company has a regular program of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of one year. Inaccordance with this program certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.

c) According to explanation given to us the title deeds/ lease deeds are held in thename of the company.

ii) As explained to us the inventory has been physically verified by the management ofcompany during the year. In our opinion the frequency of such verification is reasonable.The Discrepancies noticed on verification were not material and have been dealt with inBooks of Accounts.

iii) (a) The Company has not granted loans to any party covered in the registermaintained under section 189 of the Companies

Act2013 (‘the Act')

b) No Loans granted to any parties in the register maintained under section 189 of theact Accordingly paragraph 3(ii) (b) of the order is not applicable to the company inrespect of payment of the principal amount.

c) There are no overdue amounts for period of more than ninety days in respect of theloans granted to the bodies corporate listed in the register maintained under section 189of the act.

iv) In our opinion and according to the information and explanations given to us theCompany has complied with provision of section 185 and 186 of Act with respect to theloan and investment made.

v) The Company has not accepted any deposits during the year within the meaning of theprovisions of section 73 to 76 or any other relevant provisions of the Companies Act andthe rules framed there under.

vi) The Central Government has not prescribed the maintenance of cost records undersection148 (1) of the Act for any of the services rendered by the Company

vii) a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is regular in depositing undisputed statutorydues including provident fund income tax service tax goods and service tax cess andother material statutory dues with the appropriate authorities. As explained to us theCompany did not have any dues on account of sales tax wealth tax duty of customs valueadded tax employees' state insurance and duty of excise.

b) According to the information and explanation given to us there is no disputepending in respect of dues of provident fund/sales tax/wealth tax/service tax/customduty/excise duty/ goods and service tax /cess/value added tax were in arrears as at 31stMarch 2020 for a period of more than six month from the date they became payable.

viii) The Company did not have any outstanding dues to financial institutions banks ordebenture holders during the year.

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

x) Based upon the audit procedure performed for purpose of reporting the true and fairview of the Ind AS Financial Statements and According to the information and explanationsgiven to us no material fraud on or by the Company has been noticed or reported duringthe course of our audit.

xi) No managerial remuneration has been paid / provided clause is not applicable.

xii) In our opinion and according to the information and explanations given to us thecompany is not Nidhi Company. Accordingly paragraph 3(xii) of Order is not applicable.

xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Ind AS Financial Statements as required by theapplicable accounting standards.

xiv) The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.

xv) According to the information and explanations given to us and based on ourexamination of the record of the Company the company has not entered into any non-cashtransactions with directors or persons connected with him. xvi) According to theinformation and explanations given to us the provisions of the section 45-IA of theReserve Bank of India Act 1934 are not applicable to the company.

For R SONI & COMPANY
Chartered Accountants
Firm's Registration No. 130349W
Sd/-
RAJESH SONI
Partner
Membership No. 133240
UDIN: 20133240AAAAKF9282
Place of Signature: Mumbai
Date: 30.06.2020

ANNEXURE B TO THE AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") We have audited the internalfinancial controls over financial reporting of Sparc Systems Limited ('the Company') as of31st March 2020 in conjunction with our audit of the Ind AS Financial Statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India (the"ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the

"Guidance Note") and the Standards on Auditing issued by ICAI and deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the

Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Ind AS Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the guidance note on audit ofinternal financial control over financial reporting issued by the Institute of CharteredAccountant of India.

For R SONI & COMPANY
Chartered Accountants
Firm's Registration No. 130349W
Sd/-
RAJESH SONI
Partner
Membership No. 133240
UDIN: 20133240AAAAKF9282
Place of Signature: Mumbai
Date: 30.06.2020

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